Written by: Claire Ashcraft
Missouri modified the manufacturing exemption starting January 1, 2023. It exempts the following from state and local sales and use tax: purchases of equipment, machinery, chemicals, and materials used or consumed in mining, manufacturing, processing, compounding, or producing any product or used in research and development related to mining, manufacturing, processing, compounding, or producing any product.
This exemption previously only applied to state sales and use tax and local use tax, but not to local sales tax. Businesses with qualifying sales will report the exemption as a negative adjustment on their sales and use tax returns. It is no longer necessary to report these sales using the item code 4001 for the exemption.
More information can be found in Senate Bill 153, Section 144.054, RSMo, or the Exemptions Unit in the Taxation Division of the Missouri Department of Revenue.